IFR: Egypt One of Few Options Available to Investors

International Financing Review (IFR), a pioneer in financial market research, confirmed that Egypt's success in offering its international sovereign bonds at the end of last week, and the high demand for purchasing these bonds,  proved that Egypt is one of the few options available to investors in the world to invest their money in light of the current recession in the global economy.

IFR, in a report today, stated that Egypt has proven to be a favorite among emerging market investors, despite the fact that some sectors of the economy were affected by the Coronavirus (COVID-19) pandemic, after it collected about $5 billion yesterday after the auction of T-bonds has been covered more than 4 times with more than $ 21 billion, reflecting the rushing of international investors and their confidence in the Egyptian economy.

"Yesterday, Egypt accepted $ 5 billion in bids for international T-bonds distributed over the three tranches with a value of $ 1.25 billion in 4 years maturity at a rate of 5.750%, the second tranche with a value of $ 1.750 billion in 12-year maturity  at 7.625%, and the third tranche with $ 2 billion in duration of 30 years with a yield of 8.875%," IFR added.

The research institution said that the success of the Egyptian bond offering came despite its issuance on a day when most European countries were on vacation but, the attractiveness of the Egyptian issuance dispelled fears of being affected by demand from European investors, noting that a survey included 10 more investors about their requests to purchase Egyptian bonds, Show that every survey confirmed desire for the bonds.

Reuters, citing international investors, said that Egypt outperformed neighboring emerging markets through this offering, although these countries received support, noting that Egypt is one of the few options available to the investor, who wants to invest in a country in the same category.

The agency quoted Delphine Arrighi, portfolio manager at Merian Global Investors as saying that the success of the Egyptian bond offering is a good indication of Egypt's return to the international market.

Arrighi stressed that Egyptian bonds have always been a favorite of emerging market investors thanks to the stable economy, although they, like all other countries, face the corona pandemic and its health and economic effects. The pandemic affected some sectors such as tourism, the Suez Canal revenues and remittances of workers abroad as well as the exit of some foreign funds last March.

She pointed out that Egypt succeeded at the same time in securing a fast financing package worth $ 2.77 billion with the International Monetary Fund (IMF), and that there are advanced talks with the fund on another loan, which has had a great acceptance in the international market, especially as Egypt is moving forward in implementing major projects thats makes able to maintain achieving growth rates and job creation despite the repercussions of the corona crisis, including the a new capital, east of Cairo in the name of the new administrative capital.

"We still love Egypt and I think other investors have similar views and positions," the agency quoted one of the investors as saying, noting that the one-year, rapid IMF program to support Egypt would help bridge any gap that could result from the corona epidemic.

IFR & International agencies praise Egypt's reform

Also, the international rating agency Standard & Poor's (S&P) has downgraded more than 40 countries, including major one, while maintained a stable outlook for Egypt.

On the other hand, Capital Economics Research Consultancy said that Egypt should not face a problem in securing more funding after last year it ended a long-term program with the IMF and won praise from many sides as a result of Egypt's success in restoring the stability of the overall economy.

Capital Economics pointed out that the Egyptian economy has succeeded in bearing and compensating the exit process for foreign investors worth $8.5 billion in the past two months, thanks to the increased support directed by the Central Bank of the Egyptian economy through several measures to facilitate monetary and initiatives that helped the various sectors of the economy during the outbreak.